Providing permanently affordable housing in Northwestern Vermont NATIONAL CONGRESS ON HOUSING AND HOMELESSNESS CHRA ACHRU Montreal 2016
Providing permanently affordable housing in Northwestern Vermont SHARED EQUITY HOME OWNERSHIP
Today Homeownership in US and Canada CHT Snapshot Shared Equity: Nuts and Bolts Shared Equity: Performance A word about Stewardship Resources and Questions?
Market Vermont s three northwest counties Population 200,000 Urban, suburban, rural
CHT Snapshot $300M in assets ~ $10M annual budget $97M in annual development 2,600+ homes- 570 in Shared Equity portfolio 90 Employees
5,000 Residents 6,000 Voting Members
Security and Mobility
Shelters for the Homeless and Housing for Persons with Special Needs
Rentals 2,275 apartments $19,000,000 in gross annual rent
New Construction
Mixing Housing and Commercial
Housing Cooperatives
Shared Equity Homes
Homeownership 570 homes in SEP portfolio SEP served 1,000 HH 3-County Rehab Program Community-wide financial and CHT renter counseling and home education 1,000 homeowners served
CHT Shared Equity Homeownership
Program Design Resale Restricted Formula balance return with future affordability Ground Lease or Covenant Appraisal-Based System Require pre-purchase education Income Restricted (up to 100% AM) CHT coordinates sale, enters chain of title
Original Purchase Price New Net Price to Buyer New Appraised Value Recycling of Subsidy Appreciation New Investment (majority of CHT s share of appreciation) Stewardship Fund CHT Fee 25%= seller s Original CHT Investment New Investment (majority of CHT s share of appreciation) Stewardship Fund CHT Fee New market value Original CHT Investment Seller s Original Net Price Appraised Value at time of Purchase 25%= seller s Seller s Original Net Price Option Price To Seller
Production and Sources Inclusionary Zoning Acquisitions Buyer-initiated Resales Donations- Discounted Sale Conversions Foreclosures City and State Trust funds State Tax Credits Competitive capital grants
Leverage: Residential Finance Total Value First Mortgages $ 97,641,135 Number First Mortgages 970 Unique Lenders 41 Refinance Loans (more than) $ 8,843,701
Benefits to buyers Education and counseling Increased purchasing power Lower up-front and monthly costs - $300-400 Month Ongoing support and stewardship Stepping stone to market Savings against renting - $200-300 Month
Lower Income Buyers Access Homeownership Over CHT s 30-year history, for all 990 households: 77% earned less than 80% of median income 29% earned less than 60% of median income Average Income 69% of median income
Build Wealth for CHT Homeowners Rate of Return 6.29 2.44 S&P Equity When reselling, the average CHT homeowner got back his/her initial investment and walked away with a wealth gain of $6,763 Homeowners got a 2.5 times bigger return than if they had invested in the S&P for the same timeframe. Also save on monthly housing costs
Mobility for CHT Homeowners When homeowners sell where do they go? Other 7% Rent 30% Own 63%
Benefits to Community Retaining access to homeownership locally in hot markets Retaining and recycling public subsidiessaving money Leveraging private dollars- economy Improving housing stock Preserving housing stock- vibrant communities
Preserving Affordability
Retaining Community Wealth CHT helped 2 ½ X more households CHT cost the public 5 X less money
Hot Market- Supply
Before and After Acquisition/Rehab
Enhancing Residential Security Success of first-time homeowners (Reid, 2004) 47% Success of first-time homeowners (Herbert and Belsky, 2008) 50% Success of CHT s first-time homeowners 91%
Resale Process: Seller
Resale Process: Buyer No other primary residence Shared Equity Informational Meeting Applicati on Closing Costs Preapproval Homebuyer Education & Counseling
Resale Process: Marketing CHT Website & Online Sites Print Advertising Listing Sheets Open House & Showing Marketing
Buyer Selection Purchase & Sale Contract Inspection & Issues Letter Legal Document s Meeting Buyer Selection
Stewardship 2012 www.champlainhousingtrust.org 7/11/12
Summary Shared equity homeownership with proper stewardship really expands homeownership access to lower income households It enables them to build wealth and stabilize housing costs It requires public funding and public policies that drive capital and finance to the program BUT it is a great bargain to the public with high returns, demonstrable outcomes and sustainability
Grounded Solutions Network www.cltnetwork.org Champlain Housing Trust www.getahome.org CLT Resource Center Burlington Associates in Community Development LLC www.burlingtonassociates.com